Indian Oil Corporation Ltd. share price target

IOCL's Q3FY19 result came above our forecast on all front led by lower than expected inventory loss, forex gains and higher core GRMs. While revenue was up 26.5% YoY to Rs1.4tr, EBITDA/PAT were down 72.8%/90.9% YoY to Rs3.6bn/Rs0.7bn mainly driven by inventory losses and lower petchem profits. The company's crude throughput increased 4% YoY to 18.9mmt while sales volume remained flattish YoY at 22.8mmt. Reported GRM stood at US$1.2/bbl in Q3FY19 while core GRM stood at US$5.2/bbl. We are...

Indian Oil (IOCL) reported EBITDA/PAT of Rs15.3bn/7.2bn for Q3FY19, impacted by heavy inventory losses of Rs107bn though earnings were better than our estimates, driven by strong core performance. Core EBITDA/PAT/EPS were Rs123bn/67bn/Rs7.1. IOCL reported GRM of US$1.2/bbl though core number was a whopping US$9.2, driven by price lag impact ($5.1/bbl adjusted core GRM) and lower F&L; costs. Marketing margin also expanded by 8% qoq to Rs5/kg. Petchem earnings, however, fell ~40% qoq. volatility, marketing pricing power should be steady after elections. We cut our FY20/21...

Company Background - Indian Oil Corporation Ltd. (IOC), India's flagship national oil company and downstream petroleum major, was incorporated on 1959 as Indian Oil Company. The company was renamed as Indian Oil Corporation in 1964 following the merger of Indian Refineries (established 1958) with it. IOC's core business has been refining, transportation and marketing of petroleum products. In line with India's growing energy demand, the Company has over the years expanded its operations across the hydrocarbon value chain...

IOCL reported below-estimated Q2FY19 earnings at Rs 32.5bn (12.2% YoY, 52.5% QoQ) due to (a) weak refining earnings on low GRMs of US$ 6.8/bbl (US$ 3.5 ex-inventory) and high operating costs (US$ 3/bbl, +18.4% QoQ), and (b) below-expected petchem EBITDA of US$ 338/mt. Earnings outperformance in the marketing and pipeline businesses saved the day. We roll over to Sep'19 (from Mar'19), leading to a target price change to...

IOCL's Q2FY19 results were a miss to our estimates owing to dismal performance from refinery segment and higher forex loss. Revenue increased 45.8% YoY to Rs1.3tr on the back of higher sales volume. EBITDA/PAT were down 8.3%/12.1% YoY to Rs6.7bn/Rs32bn mainly driven by lower refinery profits. The company's crude throughput/sales volume increased 10.7%/3.4% YoY to 17.8/21.6mmt. Calculated core GRM stood at US$3.5/bbl (reported US$6.8/bbl) vs US$6.9/bbl. We are marginally raising our estimates by 3-4% for FY19 and FY20 as raising rupee exchange rate to Rs70/US$ for H2FY19 and FY20 from earlier Rs68/US$. Therefore, we raise our...

Downgrade to Neutral from BUY with SOTP based target price of Rs 153 (4x Sep 20E EV/e for standalone refining, marketing and pipeline and Rs 44/sh from other investments). IOCs 2QFY19 EBITDA came in at Rs 68.74bn, down 6.8% YoY. This is majorly attributable to a 14.9% YoY fall in the reported GRM (USD 6.8/bbl) and an increase in opex to Rs 115.96bn (vs Rs 75.31bn in Q2FY18, +54% YoY). This was partially offset by an increase in the blended gross marketing margin (+18.4% YoY) that came to Rs 3.74/ltr. Marketing volumes were up 3.4% YoY to 21.6mmt. APAT stood at Rs 33.22bn, down 10.1% YoY.

Indian Oil's revenue from operations was Rs. 149747 crore in Q1 FY 2018-19 as compared to Rs. 128183 crore in the corresponding quarter of FY 2017-18. Profit for the first quarter of FY 201819 is Rs. 6,831 crore as compared to Rs. 4,549 crore in the corresponding quarter of FY 201718. The variation is majorly on account of higher inventory gains of Rs. 7,866 crore during the current quarter, which is partly compensated by lower refining margins and exchange losses. Refinery throughput of the Company for the quarter ended 30th June 2018 increased to 17.666...

IOCL's Q1FY19 results were a strong beat to our estimates mainly due to higher inventory gain of Rs78.7 bn. Revenue increased 22.8% YoY to Rs1.3tr on the back of higher sales volume and higher prices. EBITDA was up by 142% YoY to Rs125bn and reported PAT grew by 50.2% YoY to Rs68bn. Adjusting to inventory gain, Refinery business has disappointed while marketing business delivered better than expected profits. The company's crude throughput/sales volume increased marginally 0.8%/1.6% YoY to 17.7/22.9mmt. GRM also stood at US$10.21/bbl during Q1FY19 whereas Normalized GRM stood at US$5.18/bbl adjusted to inventory gain and price lag. We are...

Our SOTP target reduce to Rs 228 (5.0x Jun-20E EV/e for standalone refining, pipeline, marketing and petchem, and Rs 46/sh from investments). Maintain BUY. IOCs 1QFY19 EBITDA came in at Rs 125.76bn, up 142% YoY and 14% QoQ. This has been attributed to 136% YoY and 12% QoQ jump in reported GRM at USD 10.2/bbl. The blended gross marketing margin was up 63% YoY and down 24% QoQ to Rs 3.77/ltr. Marketing volume was down 3.2% YoY and up 1.3% QoQ to 21.7mmt.

Refer to important disclosures at the end of this report Bi-monthly update and chart book July 13, 2018 We seek your feedback and support in the ongoing Asia Money survey. Click here to make your appreciation count Indian oil products consumption for June 2018 grew by 8.7% yoy (down 3.6% mom) to 18.0mmt. This was due to GST led base effect last year. Petrol/diesel demand rose 15%/8% yoy while lubes/petcoke/ATF/LPG increased 19%/13%/13%/3% yoy. Bitumen/naphtha was also strong at 29%/11% yoy. Kerosene/FO in turn fell 12%/3% yoy. For Q1FY19, total...